African Economic Outlook

OECD Development Centre

This fact-filled annual reference book brings the reader the latest available economic information for most of the economies of Africa. Drawing on the expertise of both the African Development Bank and the OECD, it opens with an overview that examines the international environment, macroeconomic performance, progress towards attaining the Millennium Development Goals, and governance and political issues. The second part provides individual country reports for 30 countries. Each country report provides an assessment of recent economic performance, economic projections, an examination of structural issues, and a discussion of the political and social context. The statistical annex presents 24 tables comparing economic and social variables across all the countries of Africa.

This tenth edition of the African Economic Outlook finds the continent on the rebound and expects it growth performance in the next years to resume at pre-crisis levels. The focus of the 2010 AEO is Africa's Emerging Economic Partnerships, presenting a comprehensive review of Africa's expanding economic relations with outside the continent that until very recently did not belong to the club of traditional "donors", the OECD Development Assistance Committee. Africa benefits not only from the visible direct interactions with large emerging countries – investment, trade, aid – but also from the macroeconomic, political and strategic advantages that their rise has produced. As always, country chapters provide detailed information on a country-by-country basis and the statistical annex provides a wide variety of indicators for the countries covered. This year, the AEA covers all African countries except Eritriea and Somalia.

The oil and gas sector represents the principal source of growth, even though GDP in the non-hydrocarbon sector has also done well in the past several years. Besides oil and gas, it has been the completion and acceleration of major public investment projects and household consumption that drove growth in 2010. However, a growth rate of 3.5% in 2010 remains modest considering the potential of the Algerian economy and is insufficient to bring down unemployment and ease the housing crisis. Growth excluding hydrocarbons reached 5.5% in 2010, below that of the two preceding years (9.3% in 2009 and 6.1% in 2008). Medium-term growth prospects are encouraging, but are subject to variations in the price of oil and gas. Growth should be sustained in the short term by the effects on the oil and gas sectors of increased growth in the world economy resulting in an increase in oil prices favourable to Algeria; major public spending; and an acceleration of the programme of public investment under the 2010-14 plan. Inflation in 2010 stood lower than the relatively high levels experienced the two previous years (4.8% in 2008 and 5.7% in 2009). The rise in prices, in particular in the second quarter, was due mainly to soaring world prices of the principal consumer food products.

Angola's economy is largely dependent on the oil sector and it was hard hit by the collapse in oil prices and demand in 2009. For years one of the fastest growing economies in the world, Angola's real gross domestic product (GDP) growth was just 3.4% in 2010, stalled from 2.4% in 2009 (and down from 13.3% in 2008). Despite the recovery in oil prices, growth was hampered by government arrears in construction and infrastructure payments. The outlook is good however and growth is expected to reach 7.5% in 2011 buoyed by high oil prices and by the resumption of the government's Public Investment Programme (PIP).

Benin's economy is characterised by a labour market dominated by the informal sector which involves about 95% of the working population and plays a major role in income generation. In 2010, activity was slowed down by low agricultural and cotton production, reduced public investment and floods. The cost of these unanticipated factors is evaluated at 0.8 economic growth points. An estimated 8% of the Beninese population, nearly one-third of which lives off agricultural activities, was directly affected. Growth in gross domestic product (GDP) in 2010, which was initially expected to be around 3%, is now estimated at 2.1% in a context of control over inflation, compared to 2.7% in 2009. Projections for 2011 are banking on 2.5% growth, driven by trade with Nigeria, agricultural production and the pursuance of major public projects in the form of road infrastructure, general construction work and agricultural development.

Botswana has developed from Least Developed Country (LDC) status at the time of independence in 1966 to Middle Income Country (MIC) status within three decades, largely due to the effective use of revenues from mineral resources following the discovery of large diamond reserves. Gross domestic product (GDP) per capita more than doubled, at current prices, from 3 180 US dollars (USD) in 2000 to USD 6 760 in 2008 but slipped to USD 6 215 in 2009, reflecting the impact of the global slump on demand for diamonds and other minerals. Despite the impressive progress in per capita income, rates of poverty and inequality are still high.

In 2010, economic growth accelerated over 2009, with real gross domestic product (GDP) growth increasing from 3.2% to 5.7%. The outlook for the economy in 2011 and 2012 is for higher growth, with respective rates of 6.5% and 6.2%.

Burundi's economy grew by 3.9% in 2010. As in previous years, this rate was below the government's target of 4.5%, mainly as a result of political uncertainty stemming from a series of elections in a politically fractionalised environment, as well as inclement weather. In 2011 and 2012, growth is expected to reach 4.5% and 5.2% respectively. This improvement will be conditional on better weather conditions and a more predictable political environment.

The rate of growth recorded two successive falls between 2007 and 2009. It fell from 3.3% in 2007 to 2.9% in 2008 and to 2% in 2009, before rising more than one percentage point in 2010 to stabilise at 3%. The projections for 2011 and 2012 are 3.8% and 5.3% respectively, based mainly on the strength of internal demand, notably domestic consumption. This has been driven by the benefits of financial arrangements related to the completion of infrastructure projects. Private investment in the non-oil sector should support growth by an average of 0.4 percentage points a year. At the same time, the oil sector should continue to play an important role in growth with the exploitation of reserves in the Bakassi area.

Cape Verde's economy showed signs of recovery from the impact of the global financial crisis with 2010 gross domestic product (GDP) growth estimated to reach 5.3% compared to 3.6% in 2009. In 2010 there were signs of recovery in tourism and air transport and strong support from the Public Investment Programme (PIP). However, in 2010 foreign direct investment (FDI) and associated construction inflows continued to shrink. The outlook remains uncertain for 2011 as investment largely originates from the European Union (EU), which is growing only slowly. Remittances remained fairly constant in 2010 after a slight decrease of 2.2% in 2009.

The economic recovery in the Central African Republic (CAR) was confirmed in 2010, with real gross domestic product (GDP) growth estimated at 3.4%. This positive growth came a year after the economy had suffered the full effects of the global economic and financial crisis that broke out in 2008. In 2010, the CAR also achieved the objectives set out in the 2008-10 poverty reduction strategy document (PRSP) and the year saw its economic and financial Programme negotiated with the International Monetary Fund (IMF), supported through the Extended Fund Facility (EFF) agreed upon with the IMF in December 2006. The sixth and final review of the EFF was approved by the IMF board on 25 August 2010, thus rewarding the efforts made in terms of economic and financial reform. The CAR reached the completion point of the Heavily Indebted Poor Countries (HIPC) Initiative and the Multilateral Debt Relief Initiative (MDRI).

The economy did fairly well in 2010, growing an estimated 5.9% (up from 1.7% in 2009), with the better security situation a key. Growth was also driven by external factors such as higher world oil prices. The oil sector advanced by only 0.3% however, while the non-oil sector expanded strongly (6.4%, against 3.3% in 2009). As world demand picks up and construction and oil sector investment continues, overall growth is expected to be 5.7% in 2011 and 6.9% in 2012. Inflation fell sharply to 0.6%, from 10.1% in 2009. Public finance management was problematic due to poorly planned investment spending (based on domestic funding) which widely overshot budget limits and increased the primary non-oil deficit to 28.4% (up from 25.1% in 2009). Healthy oil prices substantially improved the external position and strong growth of goods exports (+33.8%) and foreign direct investment (FDI) in the oil sector (+36.8%) reduced the current account deficit to 12.8% of GDP (from 16.9% in 2009).

The Union of the Comoros is an archipelago of three islands (Grande Comore, Anjouan and Moheli), with an undiversified economy and few natural resources. The country has suffered from chronic political instability for a number of years, with repeated coups and secessionist leanings among the islands, and this troubled political climate has hampered its economic and social development.

The economy began to recover in 2010, with estimations showing real GDP growth increasing to 6.1% from 2.8% in 2009 and largely driven by mining, which was buoyed by higher world prices. This in turn stimulated the services sector and infrastructure rehabilitation. Contributors to overall growth were mining (11.8%), construction (10.1%) and wholesale and retail trade (6.3%). The economy is expected to grow at around 6.5% over the next two years.

Congo’s economic performance in 2010 owes a great deal to the increase in its oil production. The latter reached a record level, estimated at 115 million barrels compared to 99 million in 2009. Fiscal reform and debt relief obtained under the HIPC Initiative also consolidated fundamental indicators and improved the budgetary balance. The result was a strong 10.2% growth rate in 2010, with 8.4% expected in 2011. These growth rates nevertheless remain fragile. They depend too heavily on the international oil market and maintenance of a high level of oil production. Medium-term forecasts show that oil production will gradually diminish unless new reserves are discovered. Diversification of the economy remains a crucial issue. Construction, public works and telecommunications continue to thrive. The forestry sector seems to be recovering after having been penalised by the global crisis. Increased demand from Asian countries, particularly China, which is the leading buyer of Congolese timber, is ensuring the industry's survival.

The political impasse in Côte d'Ivoire following the second round of the presidential elections on 28 November 2010 turned into an armed conflict between the defence and security forces led by the outgoing president Laurent Gbagbo and the republican forces loyal to Alassane Ouattara, the elected president recognised by the international community. After several days of heavy fighting, the pro-Ouattara forces arrested Gbagbo and several of his aides while they were in the bunker of the presidential palace. The escalation of the violence and the use of heavy weaponry have increased the civilian death toll to more than 900 according to the UN, with thousands more injured and massive numbers of Ivorian refugees, especially in neighbouring Liberia and Ghana.

In 2010 Djibouti saw steady economic growth, at an estimated 4.4%, albeit slightly below the 2009 level of 5%. The less vigorous Performance of the economy in 2010 was due to a reduction in port Operations, upon which the country's economy is heavily dependent, and the postponement of planned foreign direct investment (FDI). Nevertheless, domestic private investment accelerated.

Egypt has been on the brink of social and political turmoil for the past few years, with evident signs of mounting frustration among citizens, mainly due to the severe socio-economic conditions, constraints on liberties and an uncertain political outlook. Inspired by the Tunisian revolution, Egyptians started a large-scale uprising on 25 January 2011 and after 18 days of protests, Mr. Hosni Mubarak stepped down, bringing to an end his 30-year rule as Egypt's President. Power was handed to the Supreme Council of the Armed Forces which became responsible for conducting the affairs of the State and leading the transitional period according to a constitutional declaration issued on 30 March, until the parliamentary and presidential elections are held towards the end of 2011.

Equatorial Guinea's economy experienced growth of 1.2% of GDP in 2010 as a result of the fall of oil output and the main oil-producing fields reaching their maturity. The economy has been on a downward trend since 2004, when real GDP growth peaked at 38%. 2010 experienced one of the lowest growth rates since oil exploitation of hydrocarbons began in the mid-1990s. It is expected to recover and return to high growth rates of 5.0% and 7.5% in 2011 and 2012. Despite lower outputs from the oil industry, growth will be sustained by the international demand for hydrocarbons and the construction of major infrastructure projects, including those for the hydrocarbon industry.

In 2010, Ethiopia continued to register the fast growth as it has for the last five years. Gross domestic product (GDP) growth in 2010 (2009/10) remained strong at 8.8%. Growth is driven by the service sector (14.5%), followed by the industrial (10.2%) and agricultural (6%) sectors. Except for a rebound in fishing, the rest of the agricultural sub-sectors remained fundamentally unchanged from their levels in 2009. The service sector's leading role is due to hotels and restaurants, financial intermediation, public services and real estate. The country continues to struggle with the macroeconomic challenges of high inflation and very low international reserves. The government's five-year Growth and Transformation Plan was launched in 2010/11. If it is successful, the prospects for 2011 and 2012 are likely to be as positive as in 2010. The plan calls for the agriculture sector to become the major source of economic growth. Industrial growth will also be given particular attention. The government intends to promote industrialisation through increased exports and import substitution. The economy is projected to grow at an average annual rate of 10% in 2011. The agriculture sector is expected to grow by 8.1% while industry and services are expected to show an average annual growth of 20 and 11% respectively during the planned five-year period of the government.

The country's main economic and social indicators improved in 2010, with restored overall growth (5.5%) and a healthier budget situation. The current account surplus grew despite inflation above the target level.

Gambia is a low-income country with a structural food deficit but it has managed to post relatively strong growth rates over the past three years. In 2010, growth slowed to 5.4% from 6.7% in 2009 as the global slump continued to be felt on re-exports, tourism and remittances. Growth should pick up to 5.6% this year and next. Good harvests -- especially of rice -- and gains in the construction and banking sectors drove economic growth. The newly-launched National Agricultural Investment Plan aimsto improve agricultural sector productivity.

Ghana has rebased its national accounts, changing the base year from 1993 to 2006. According to the national authorities, following the rebasing, the size of the economy in real GDP terms has been raised threefold and placed Ghana among the lower middle income group of countries. The rebasing has also suggested greater fiscal space for Ghana with a reduced revenue-to-GDP ratio. While questions on the international acceptability of the new numbers remain, one point is clear: they confirm what most observers have often suggested, namely that the size of the Ghanaian economy has hitherto been grossly under-estimated.

Guinea is a poor, fragile country, despite considerable unexploited economic potential. It has the world's largest reserves of bauxite (two-thirds of global reserves), as well as large deposits of iron ore, gold and diamonds. It also has the potential to develop other metals, oil and gas. Persistent structural and institutional weaknesses have prevented Guinea from developing a strategie vision and implementing the type of policies needed to reap the full benefit of its mineral wealth.

Economic growth in Guinea-Bissau picked up slightly to 3.6% in 2010 from 3.0% in 2009 thanks to higher cashew nut prices, sustained construction of private housing and major infrastructure projects. The indirect impact of the global economic crisis, felt mainly through lower government export revenues and remittances, has been mitigated by a strong increase in the world demand for cashew nuts. Heightened political instability, however, resulted in the withdrawal of budget support from the European Union (EU), one of the country's main development partners. Economic growth is expected to increase to 4.5% and 4.8% in 2011 and 2012, sustained by increased agricultural production, cashew nut exports and foreign direct investment (FDI) in mining projects and infrastructure. The major downside risk is persistent political instability, which could result in a further decrease in donor funding, hampering the execution of the public investment programme in the coming years. In the medium term, inflation is expected to remain within the Central Bank of West African States' (BCEAO) target of 3%, maintaining the good performance of 2010.

The macroeconomic performance of the Kenyan economy improved significantly in 2010 compared to 2009. While the economy grew by 2.6% in 2009, it is estimated that the growth rate of GDP nearly doubled to reach 5.0% in 2010. The increase in growth can be attributed to the good rainfall during 2010 and higher prices for Kenyan exports on world markets. The abundance of agricultural output, coupled with increased competition in some key services, helped contain inflation in 2010. However, the Kenyan economy faces two challenges: diversification and the reduction of its dependence on the vagaries of nature.

There are signs of Lesotho's economic recovery from the effects of the global financial crisis, but the damage caused to this small and open economy may last for a while. Lesotho's high export concentration left it vulnerable to the global economic downturn. This was exacerbated by Lesotho's dependency on South Africa, a country that was also affected by the collapse in commodity prices. Lesotho's economic growth declined by about 4.4% in 2008 to 1.9% in 2009. As the global economy began to recover, however, Lesotho's gross domestic product (GDP) in 2010 grew by an estimated 3.8%. This recovery in economic growth can be attributed to both firming commodity prices and high government capital expenditures. The mining and construction sub-sectors, in particular, experienced some buoyancy. In addition, rising commodity prices led to the improved viability of mining activities, resulting in the reopening of some of the mines that had shut down at the peak of the crisis. Furthermore, the government's focus on infrastructure development is driving activity in the construction sector.

Liberia's economy is recovering from the global economic downturn. Growth in 2010 was estimated at 6.1%, up from 4.6% in 2009, driven by an increase in exports and foreign direct investment (FDI). Growth is projected to reach 7.3% in 2011 and 8.9% in 2012. The rise in exports was thanks to an increase in commodity prices, particularly rubber, palm oil and minerals. In 2010, the government also began receiving royalty payments (of USD 1.57 million) from the extractive industries sector and these are projected to grow to USD 30 million by 2015.

Further to the anti-government protests of 17th February, the so called "Day of Rage", Libya has experienced an escalation of violence which has led the country into an armed conflict which persists at the time of writing this report and which has seen the country effectively split between government- controlled areas in the West and anti-government controlled ones in the East. The latter is backed by an international coalition which is enforcing a no-fly zone to protect it from pro-Gaddafi forces.

Madagascar inched back to growth in 2010, with the country still suffering in the political fallout from the 2009 coup that ousted president Marc Ravalomanana and compounded the impact of the 2008-09 global slump. The economy expanded 0.3% last year after shrinking 3.7% in 2009. This was achieved despite donor countries cutting the development aid that has traditionally funded public investment in infrastructure. The international community does not recognise the political normalisation programme of the current government and so development aid is not expected to return to pre-crisis levels in the short term, with growth expected to be slower as a result.

The political and macroeconomic environment remained stable in Malawi through 2010. Malawi's real gross domestic product (GDP) is estimated to fall to 6.7% in 2010 from 7.6% in 2009. The slight reduction in real GDP growth is largely attributed to reduced agriculture output for maize and tobacco due to the drought experienced in some parts of the country at the beginning of the 2009/10 growing season. The main driving force for economic growth in 2010 has been strong performance in mining and quarrying, construction, financial and insurance services and information and technology. Real GDP growth is forecast at 6.4% in 2011 and 6.0% in 2012 reflecting stability in uranium output and levelling off of productivity gains in the agriculture sector as the agricultural growth rate has peaked.

The structure of the economy, dominated by the primary and tertiary sectors (36% and 35.6%of GDP), did not change much in 2010 and should stay largely the same in 2011, with a small decline in the primary and tertiary sectors in favour of the secondary. Real GDP growth in 2010 (4.5%) was the same as in 2009, though lower than expected.

The structure of the Mauritanian economy, characterised by the predominance of the secondary and tertiary sectors (with 34.7% of gross domestic product [GDP] and 44.8% of GDP respectively) remained almost entirely unchanged between 2009 and 2010. After a fall in GDP of 1.2% in 2009, the economy should rebound in 2010, with GDP expanding by an estimated 5%. This is expected to become stronger in the coming years with a slight decline in the tertiary sector to the advantage of the primary and secondary sectors. This performance is the outcome of the combined effects of the implementation of the public finances reform programme agreed with the International Monetary Fund (IMF) and the substantial rise in international minerals prices.

Mauritius is striving to diversify its "four-pillar" economy — sugar, textiles, tourism and financial services — to make it more resilient to shocks, enhance productivity and competiveness, and support growth and job creation. The 2010 budget focused on job creation, social development and the environment. It maintained previous support measures taken by the government. For 2011, the three main thrusts of the budget are rebalancing growth, boosting productivity and consolidating social justice.

The involvement of the Moroccan economy in its regional and global environment has found expression in the signature of several free-trade agreements with its main trading partners. But it also exposed the country to the fall-out of the international crisis which hit world markets in 2008. The basics of the national economy remained stable in spite of the crisis and the country displayed a degree of resilience in the face of external shock, with a growth in gross domestic product (GDP) of 4.9% in 2009 and 3.3% in 2010. Nevertheless, the crisis has highlighted structural weaknesses, in particular in certain export-oriented sectors such astextiles and clothing.

Mozambique's economy continued to perform well in 2010, growing by an estimated 8.1%. Growth in 2009 had been achieved despite a drop in aluminium prices, offset by massive inflows of foreign direct investment (FDI) in coal projects, whereas in 2010 the economy benefited from both FDI and recovering aluminium prices. In addition, coal extracted from the "mega-projects" in Tete province will start adding to exports in 2011. Exports are therefore expected to increase, although the current account balance will remain structurally negative due to the country's dependence on imports of food, oil and manufactured products. Mozambique is expected to maintain high growth rates in the medium term, driven by mega-projects.

The Namibian economy grew by 4.2% in 2010, following a 0.7% contraction in 2009. Growth was due primarily to a rapid recovery in diamond and uranium mining activities, but also to credit extension. The sustained improvement in global demand for mineral products is expected to maintain gross domestic product (GDP) growth in 2011 with a slight rise to 4.8% in 2011, and then a minor drop to 4.6% in 2012.

Real gross domestic product (GDP) growth in 2010 was estimated at 5.5%, essentially driven by the agricultural sector which achieved good results throughout the country. This situation contrasts with that of 2009 when, as a result of low rainfall, GDP dropped -1.2% after growth of 9.5% in 2008, which was an exceptional year. Growth should return to 4.9% in 2011 and then recover to 11.5% in 2012 as production starts at the Imouraren uranium mine, the biggest in Africa.

Nigeria is making progress with economic reforms that are delivering strong economic fundamentals. The government has maintained prudent macroeconomic policies, strengthened financial institutions and, albeit slowly and unevenly, is undertaking reforms to transform the economy structurally. The reform effort, aided by revenue from high oil prices, has led to significantly improved macroeconomic outcomes, including weaker inflation and strong GDP growth. Real GDP growth rose from 7.0% in 2009 to an estimated 8.1% in 2010. The robust growth in 2010, in the aftermath of the global financial and economic crisis, underscored the resilience of the Nigerian economy and to some extent, the prudence of its economic policies. Medium-term prospects are also bright, with real GDP growth projected to remain strong and stable at 6.9% in 2011 and 6.7% in 2012.

In 2010, the economy of Rwanda recovered from the sharp downturn it experienced in the previous year by growing at 7.4%. The outlook for 2011 and 2012 remains robust. The rebound is driven mainly by increased exports, expansion in the growth of services and construction sector. Inflation also has declined considerably in 2010 compared with 2009 when food prices increased by more than 20% in the wake of the global food crisis. The macroeconomic balance also improved in 2010 and is expected to remain stable in the mid-term.

The gross domestic product (GDP) of the Democratic Republic of São Tomé and Príncipe (STP) slowed down in 2009 but picked up timidly in 2010 to an estimated 4.5%. Growth was sustained by foreign aid and the tertiary sector, including tourism, construction and retail. The economy is forecast to expand by 5.0% in 2011 and 6.0% in 2012, supported by foreign direct investment (FDI) in oil exploration and the construction of a new deepwater seaport. The longer-term outlook, however, remains highly dependent on uncertain oil prospects, with production not expected before 2016.

After two years marked by the effects of the global financial crisis, the Senegalese economy began to recover in 2010 thanks to the global economic recovery and the measures taken by the authorities to boost national economic activity. Gross domestic product (GDP) was estimated to have grown from 2.2% in 2009 to 4.2% in 2010, and is projected to reach 4.5% in 2011. This will be largely due to the performance of the three sectors of the economy - primary, secondary and tertiary - which respectively accounted for 14.7%, 20.4% and 64.9% (including administration) of GDP in 2010.

In 2010, the Seychelles economy recovered after important measures were taken to address the 2008 debt crisis. The country also weathered the recent global financial and economic crisis relatively well. Driven by the tourism industry, which accounts for 25.5% of the gross domestic product (GDP), the economy grew by over 5% from 0.7% in 2009 to an estimated 6% in 2010. There were higher numbers of visitor arrivals with a longer average stay, which increased by 13% and 5%, respectively. This was supported by a rebound in the global economy, a weaker rupee and price discounting by operators. Piracy attacks and threats in the Indian Ocean continue to affect the fishing sector adversely, however. The economy is projected to grow by 4% in 2011 and 4.5% in 2012.

Having recorded 4.5% in 2010, growth is projected to rise to 5.1 in 2011 and to gradually recover to 6.0% in 2012. The medium-term outlook for the Sierra Leonean economy is positive, but even more could be done on the structural reform side to help bring the country on a path of high growth with the job creation needed for significant improvements in people's living standards. Growth is being driven by exports of minerals and cash crops due to the global recovery, the expansion of the service sector, increased agricultural productivity, and continued investment in infrastructure. The recent completion of the Bumbuna power station has already started to yield benefits. The government has undertaken key reforms (e.g. in the financial sector, tax reforms) that will bring benefits only later but bode well for the country's future.

Real GDP has recovered from -1.7% in 2009 to 2.8% in 2010; this rate of GDP growth remained clearly below potential, estimated around 4% per annum for South Africa. GDP is expected to grow at a rate of 3.6% in 2011 and 4.3% in 2012. GDP growth for 2010 was driven primarily by a steady recovery in consumer spending, partially attributed to the FIFA World Cup. Inflation fell to 3.5% by the end of 2010, averaged 4.3% in 2010, and is expected to reach 5.3% in 2011.

Sudan's economy picked up slightly in 2010 to grow 5%, after 4.5% in 2009 but this was one percentage point lower than expected. The economy is projected to grow 5.1% in 2011 and then 5.3% in 2012 largely due to increased oil production and sustained gains in the non-oil sector. The non-oil sector remains buoyant and should underpin economic growth in the medium term through the continued revival of agriculture and increased investment in infrastructure, especially roads and electricity, and manufacturing.

After averaging 2.9% during 2004-08, economic growth in Swaziland significantly dropped in 2009, mainly due to the impact of the global economic downturn on export-oriented sectors, in particular textiles and wood pulp. Other contributory factors were prolonged drought and low levels of foreign direct investment (FDI). In 2010, the economy moderately recovered with a rebound in global demand mainly for sugar and textiles. However, falling receipts from the Southern African Customs Union (SACU) coupled with lower internal revenues constrained the government's ability to implement counter-cyclical measures. In order to support economic activity in 2010, low interest rates were maintained in line with those of South Africa. However, the main focus of the Central Bank of Swaziland continued to be price stability. Inflation was 4.5% in 2010, down from 7.5% in 2009. This was mainly driven by lower prices for food and transport. Inflation is forecast at 7.7% in 2011, reflecting the lagged impact of increases in tariffs for water and electricity in 2010. The anticipated fuel and food crises are also expected to impact domestic price levels.

Tanzania registered eight consecutive years of gross domestic product (GDP) growth in excess of 6% until the global economic downturn began to affect growth in 2009. Consequently, the country achieved one of the most impressive rates of growth for a non-oil-producing sub-Saharan African country in the 2000s. Available data suggest that Tanzania's real GDP growth is firmly on the recovery path with growth at an estimated 6.8% in 2010. Economic prospects for the medium term continue to look bright: inflationary pressures are low, gold prices (a major Tanzanian export) are at historic highs and investor sentiment towards East Africa's second largest economy remains upbeat.

Despite a difficult international environment, Togo maintained growth at 3.4%, which though not very strong, allowed the country to achieve the Heavily Indebted Poor Countries (HIPC) Initiative completion point. Growth is projected to continue at a slightly higher rate in 2011 and 2012, at 3.7% and 4%, respectively. The inflation rate has been estimated at 5.3% for 2010 versus 2.9% in 2009, and is projected at 2.4% for 2011.

When a young man died after setting fire to himself in the town of Sidi Bouzid, 265 kilometers from Tunis, in mid-December, students, young people and others took to the streets to protest against unemployment and the high cost of living. Unrest and clashes with police and troops spread to other parts of Tunisia, including Jendouba, Kasserine, Le Kef and Gafsa, and then to big cities and the capital. President Zine El Abidine Ben Ali and his aides fled into exile in Saudi Arabia on 14 January 2011, ending his 23-year rule. The shock-wave of the revolution was felt in neighbouring countries. It also shook Tunisia's economic, social and political stability and sharply changed prospects for the future.

The Ugandan economy recorded weaker growth of 5.1% in 2010 because of receding aggregate demand, mainly in private consumption, and weak external demand for traditional exports, in particular coffee. In spite of the declines, regional demand for Uganda's exports remained high. Export earnings fell from 2.9 billion US dollars (USD) in the financial year 2008/09 to USD 2.8 billion in 2009/10. Although lower than 2008/09 levels (USD 883 million), remittance receipts in 2009/10 (USD 820 million) surpassed traditional foreign exchange earners coffee and tourism. Earnings from coffee and tourism in 2009/10 were USD 262 million and USD 400 million respectively. Sustained public investment in infrastructure and the global recovery are expected to spur growth in the short to medium term. The near-term prospects for the oil and gas sector remain uncertain because of disputes between the government and oil exploration firms. The real gross domestic product (GDP) growth rate is projected to increase to 5.6% in 2011 and 6.9% in 2012 because of increasing regional demand and the improved global outlook.

The projected 6.6% growth in Zambia's GDP in 2010 is up from 6.4% in 2009. Agriculture, tourism, construction, manufacturing and mining are driving growth which is expected to expand by 6.5% and 6.7% in 2011 and 2012 respectively.

The Zimbabwe economy is rebounding after a decade of economic decline during which time real gross domestic product (GDP) fell by more than a third and per capita income fell by 40%, combined with prolonged or chronic inflation and hyperinflation.